Oil futures rose yesterday, as concerns about the flooding of the Mississippi River forced oil futures to rise, in spite of signs that the Chinese economy was slowing down. WTI crude future increased by 0.16 percent to USD $ 104.05 a barrel. Brent crude future was at USD $ 117.63 a barrel.
The flooding of the Mississippi delta is posing serious problems to the oil refineries located in that region. 11 plants are located there, and they account for 13 percent of US oil output. Fears about probable supply disruptions from this region have stroked investors’ fears, leading to the price hike.
Also, a report to be released by the US Energy Department is expected to show that the level of US crude oil stockpiles decreased last week, a sign that there is sufficient demand for oil.
Even though both of these factors were the driving forces behind the price surge, a higher than inflation rate in China did result in panic selling off. Consumer prices in China rose by 5.3 percent in April, higher than the benchmark set by the government of 4 percent. It is expected that China shall tighten the interest rates in order to cool down the economy. Ultimately, however, events closer to home, such as the Mississippi River Flooding, dictated the direction in which the market went